If you're among the skeptics selling drug stocks due to weaker than expected earnings, Cramer thinks you don't get the pharma business.

"No matter how many times I say it, people don't seem to get it," insisted the Mad Money host.

"The pharmaceutical business is not about near-term earnings estimates or earnings just reported, it's all about pipeline, what's in the works. That which could be blockbuster."

And on Wednesday, Cramer was largely dismayed by the number of investors in the market who were selling Merck.

Jan Mammey | Stock4B | Getty Images

For the most part, sellers were focused on recent earnings in which Merck reported lower-than-expected first-quarter sales due to generic competition. In addition, the company cut its profit forecast for the full year.

"The quarter was widely panned," Cramer admitted. But those sellers probably didn't understand the pipeline. Had they, he doesn't believe they would have sold.

"Merck currently has at least 35 drugs in the pipe and many of these could be very profitable in the 'out years.'" Cramer explained. They range from from treatments for everything from Alzheimer's to asthma. (Click here to see the Merck pipeline.)

Cramer thinks as one or more of these drugs starts to show promise, the Street will begin to factor in the earnings potential – and the earnings potential could be huge. If and when that happens shares could take off.

In fact, Cramer thinks management at Merck is anticipating developments outlined above and they're currently trying to get ahead of the move.

"I believe that's why Merck's has committed to buying $15 billion of its stock now, because management knows that it has some huge drugs that will be terrific in the future," Cramer said.

Elsewhere in pharma, Cramer also has an eye on Regeneron in part because rival Allergan delayed a drug for macular degeneration. "This great news for Regeneron, which has the best current drug out there for macular degeneration and the competitive woes from a much more established company just vanished," he said.

Turning attention to Johnson & Johnson, Cramer said, "it also has a terrific pipeline and there's a chance it could split up. I think this stock is also worth betting on."

Disclosure:As of Monday April 29th, Jim Cramer owned Merck and Johnson & Johnson on behalf of his charitable trust.